How did you come to take over the family business?
Olivier Pages: Itesa was founded by my grandfather in 1978. The business originally specialised in the distribution of alarm systems to professional installation contractors in the Marseille region. The company flourished, but then after my grandfather left for health reasons, it ran into severe problems in the early 1990s. When I took over Itesa in 1997, it had just four employees left and its sales barely reached €300,000. To inject fresh impetus into the company, I set two priorities: expanding our offering into new areas (CCTV, access controls, fire detection) and aggressively building up our range of services. That approach proved a winner since seven years later its sales had grown ten-fold to €3 million.
And yet that was still well below the €43 million you generate today?
O.P.: It was scaling up our network to achieve nationwide coverage that really took us up to the next level.
Until 2004, we were basically a regional player. That year we opened our first branch in Paris based on a model with a sales manager focusing on business development and a technician able to handle both after-sales service and logistics. Since this approach was a success, we opened one new branch every year along the same lines. Today our network has 12 branches in France and another in Switzerland.
How do you account for your longevity in what is a fiercely competitive market?
O.P.: As I mentioned, one of our major strengths is that we focused on services at a very early stage, and that is crucial when you work with tradespeople and SMEs.
The basic requirement is to carry a large inventory (2.5 months' sales of 3,500 SKUs) and to be able to deliver in 24 hours. That's a bare minimum. But we go even further to make things simpler for installation contractors. They can contact one of the 22 technicians staffing our hotline at any time free of charge. We also offer to pre-programme their equipment in our workshop or to go out with them to finalise the programming on site. Our approved training department runs educational courses covering the entire product range. We are constantly looking for ways to raise our quality of service. Acquiring new skills and expertise via external growth is a strategic option we are considering.
What are your other development priorities?
O.P.: On the service side, we have also begun to embrace the digital revolution, and our goal is to have an e-commerce website up and running shortly to make our customer relationships even smoother.
Ultimately, the site will also enable us to secure leads, which we will then pass on to members of the Itesa club of approved installation contractors, which we set up recently.
On the network side, we want to continue expanding our coverage in France and also to move into other European countries. That will probably involve an acquisition so that we can get up to speed rapidly by bringing in existing skills.
What role do the investors supporting you play?
O.P.: Since 2008, we have had the backing of several funds. The original purpose was to support our LBO and give the key managers a stake in the capital. We operated based on a four-year investment cycle. We then realised that this was too short a horizon because we were spending too much time on the entry/exit process. With Crédit Mutuel Equity's arrival, we changed our strategy and chose a partner that invests its own capital and can take a long-term approach.
We also wanted an experienced partner to guide and support us with our new acquisition-led growth priorities.
What the partner says
When we met Olivier Pages in late 2016, Itesa was on the verge of being France's leading distributor of electronic alarms, CCTV and access control products to contractors, ahead of the subsidiaries of major international groups. It had achieved this feat solely through organic growth, illustrating the importance of the quality of the services ITESA provides, including:
- logistics: product availability and deliveries in 24 hours, nationwide coverage
- technical advice and contractor assistance: hotline and in-branch advice
- a deep product range: selective and integrated approach encompassing the best-performing technologies
The meeting with Crédit Mutuel Equity took place at a crucial time for the business, which had established a solid national base and was looking to expand outside France, most likely through an acquisition. Itesa still possesses the potential for organic growth in France, but it was seeking to add the vision of an equity investor to guide its planning concerning acquisitions abroad, unknown territory for a group that has a strong corporate culture. The group's growth potential in France and beyond and its robust business model and teams were the primary factors that made us decide to provide our support.
€43 m of revenue
110 employees
4500 customers